meo valuation, page-17

Hi botchee

To look further into your interesting point.

If we look at the present farm in value of Artemis we can look a it this way:

With 0% gas (or 32%GCOS) MEO did a deal with PBR for 31.5m + 7.5m back costs + 41m for the first well. So, failing anything else, we have received US$80m for a 50% share in the permit.

This $80m/477.2 equates to 17c per share just for going to the bargaining table. Don't forget this includes payment to MEO for the work they have already done.

In the event of success at A#1 MEO will then receive an extra 31.5m + 62m for two follow up wells. So in total PBR will pay:

7.5 + (31.5x2) + 41 + (62x2) = US$235.5m for their 50% share.

Divide this by shares on offer: 235.5/477.2 = US$0.49cps.

And this happens to be the current SP.

We can compare this to the US$7m (1.46cps) we paid for 5% equity from MOG. This is relative to US$70m (14.6cps) for 50% with no extra payments on success compared to the 17+32cps payments from PBR.

If Artemis is good to us these prices will look cheap but we will still have 25% equity with no risk (value $3.25cps) and only 5% each to pay on the next two wells.

Alternatively we will be looking at the value of our other ventures which should have progressed by then.

#:>))